Musk eyes telecom throne: at&t, t-mobile, verizon block starlink's bold bid
Elon Musk’s SpaceX is facing a formidable wall in its pursuit of dominating the US wireless market. Major carriers – at&t, T-Mobile, and Verizon – have slammed the door shut on any potential Mobile Virtual Network Operator (MVNO) deal with Starlink, effectively quashing Musk’s ambitions to deliver connectivity to both rural and urban areas.
A strategic pivot: analysts urge a different approach
Just days before SpaceX’s highly anticipated stock market debut, Wolfe Research analysts delivered a startling recommendation: Starlink should acquire one of the ‘Big Three’ telcos. Senior analyst Peter Supino argues this isn’t a matter of preference, but necessity. He postulates that adding Starlink to the competitive landscape would trigger a four-way battle, ultimately reducing profitability for all involved.
“A more beneficial outcome would be to avoid this scenario altogether, and the best way to achieve that is to simply buy a network,” Supino stated. The key? Eliminating the potential for a disruptive newcomer.
T-mobile: the most logical target
Supino’s analysis singles out T-Mobile as the ideal acquisition target. The carrier’s lack of a wired infrastructure eliminates any redundancy, while a purchase would also grant Starlink a foothold in Germany and Austria via Deutsche Telekom. It’s a strategic play with significant geopolitical implications.
But Musk’s history suggests he’s not one to shy away from unconventional moves. He famously bought Twitter despite its chaotic state, demonstrating a willingness to embrace risk – and potential disruption.
Spectrum acquisition and the aws-3 auction
Despite the carrier resistance, SpaceX isn't relinquishing its ambitions. The company has secured 65 MHz of mid-band spectrum through EchoStar and is actively participating in the ongoing AWS-3 auction. This, combined with potential acquisitions like the 700 MHz band, CBRS, C-Band, MVDDS, and millimeter wave licenses, could dramatically shift the balance of power.
Alex Besen, founder of The Besen Group, predicts Starlink could reach 20 million US subscribers within five years, fueled by its satellite constellation. He dismisses the notion of focusing on niche markets, emphasizing its long-term vision for global mobile satellite dominance.
Industry skepticism and musk’s unpredictability
Roger Entner, founder of Recon Analytics, believes Musk would prefer to build a telecom company from scratch, rather than absorb a traditional carrier. He argues that the industry’s reluctance to partner with Starlink stems from a perception of it as an immediate threat. Indeed, the Big Three have even bolstered SpaceX’s rivals with satellite partnerships, a move that speaks volumes.
Despite these obstacles, one thing remains constant with Musk: his unpredictability. As he showed with Twitter, his decisions often defy conventional wisdom. And, according to reports, he’s already reportedly unhappy with the returns SpaceX is currently generating from its partnership with T-Mobile.
Ultimately, the question isn’t whether Starlink will enter the cellular market – it’s how it will do so. The refusal of established carriers highlights the magnitude of the challenge, but it also underscores Musk’s determination to reshape the future of connectivity.